Rendell says Sony will close western Pa. plant

HARRISBURG, Pa. (AP) — Sony Corp. officials plan to close a western Pennsylvania television factory that employs about 560 people as part of the company’s worldwide layoff plan.

Gov. Ed Rendell said Tuesday the plant is a casualty of the worldwide recession and innovations in making flat-panel televisions lighter. The lighter televisions can be shipped easier from overseas, making a U.S. production facility unnecessary, Rendell said.

The Pittsburgh-area plant’s manufacturing facility will be the first to halt operations, beginning at the end of February, Sony said in a news release. By March 2010, the plant’s repair and logistics operations will wind down.

Tokyo-based Sony is cutting 8,000 of its 185,000 jobs worldwide — about 4 percent of its work force — and about a half-dozen of its 57 factories. Sony also plans to reduce its electronics investments by about one-third by the end of March 2010.

Sony received about $40 million in government incentives for the plant, which opened in 1990 near New Stanton, about 30 miles southeast of Pittsburgh. In 2000, the plant had 3,400 employees, but has slowly shed workers as technology advanced, said Michael Koff, the facility’s manager of corporate communications.

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Initially, the plant produced large rear projection TVs, but in recent years has focused primarily on manufacturing flat-panel LCD screens, repairs and logistics. It has also been Sony’s East Coast TV distribution center.

Koff said three factors contributed to the company’s decision to close the plant: the dire economic situation, foreign currency conversion issues and the fact that demand for TVs is expected to significantly decrease next year.

In addition, while the Pittsburgh-area facility was logistically competitive when TVs were big and bulky and not many could fit into a truck, that advantage disappeared once LCDs became popular, Koff said.

Hourly employees will receive a one week’s pay for every year of service, with a minimum of four weeks, Koff added. Salary workers will receive two week’s pay for every year of service, with a minimum of eight weeks. Sony will pay for 30 days of health benefits. After that, former employees will be able to independently pay for those benefits for up to 18 months.

“I guess for this facility it’s sort of a perfect storm, everything coming together all at once,” Koff said. “You can’t keep a facility going when you don’t have to produce anything there.”

Sony leases the plant, a former Volkswagen factory, from the Pennsylvania Industrial Development Authority. The company intends to honor the lease, which expires in 2010, Rendell said

Laid-off employees will be eligible for state-subsidized job training.

An official who answered the plant’s main switchboard said the workers there are nonunion.

Rendell said two companies have told his administration they may move into unused space at the plant and hire some of the people who lose their jobs.

Rendell would not identify the companies, but said one is a renewable energy company.